Banking on war

Canadians may be relieved that we've eluded George W. Bush's "coalition of the willing," but our government has been more than willing to profit from the disastrous Iraq war through one of our more esteemed social programs.

That would be the Canada Pension Plan, due to be turned over lock, stock and barrel to a Crown corporation next month by the federal Liberals. The mandate of the Canada Pension Plan Investment Board , the 12 unelected appointees who run the plan, is to invest billions in the often volatile stock market. But some of the industries into which they've chosen to sink cash are purveyors of death, addiction and pollution, not just here, but all over the planet - making the CPP one anti-social social program.

Back in the 1990s, when Paul Martin was in charge of both the Ministry of Finance and one of Canada's largest steamship companies, the government told the public there would not be sufficient funds in the pension program to cover the retiring baby-boom generation.

The government - ever ready for privatizing solutions - enacted legislation in 1997 that allowed excess money in the fund (cash not needed for those immediately receiving benefits) to be invested not just in bonds, which was the case up till then, but in the stock market. The new legislation also doubled the premiums taken from workers' paycheques. And lastly, they created a Crown corporation to run part of the operation. Come September 1, it will take full control over every aspect of administering the plan.

In 1999, the Ministry of Finance threw the board about $20 billion of excess pension funds along with its blessing to invest in the stock market. "The mandate of the board is to invest in the best interests of the 16 million contributors and beneficiaries of the CPP, and do so without undue risk," says investment board manager of communications John Cappelletti.

Between 1999 and 2003, the board lost around $4 billion. But this year it showed a gain of about $10 billion, bringing the total amount of CPP stocks, bonds and cash to around $70 billion as of March 2004. For the moment at least, pension benefits appear to be secure, although the increase in funds is mainly due to the increase in premiums. Within a decade, the fund is expected to be worth about $160 billion, according to the CPP Investment Board's Web site (www.cppib.ca). However, the board's policy of investing billions in companies that peddle weapons, tobacco, alcohol and oil needs to be debated publicly, not dictated from a boardroom.

In February 2004, NDP MP Pat Martin introduced a bill in the House of Commons calling for the CPPIB to stop buying shares in military contractors and firms "whose conduct and practices are contrary to Canadian values."

The CPPIB invests on behalf of Canadian workers to the tune of $2.5 billion in well over 100 foreign and Canadian weapons manufacturers, about $600 million of which goes to the most powerful U.S. contractors, including Lockheed Martin, Boeing and Halliburton. These corporations not only rake in billions of U.S. taxpayer dollars from defence contracts, but they also lobby aggressively to influence U.S. defence policy. Lockheed Martin, for example, has spent millions lobbying legislators in Washington to pursue such costly and dangerous initiatives as NATO expansion and Missile Defense.

Meanwhile, our own military-industrial complex enjoys the use of over a billion dollars in investment funds from the Canada Pension Plan. "Companies that produce arms are part of our portfolio," says Cappelletti. "Many Canadians support policing and Canadian armed forces and peacekeeping missions around the world. Those activities require arms," he says.

Of course, few people would argue against the need for peacekeepers to have arms. The NDP's argument is that these companies generate most of their profits by making high-tech weapons sold not to the Canadian military but to the U.S., including the guided missiles and cluster bombs currently being used in Iraq.

"Here we've taken great pride in staying out of the war in Iraq, and now the government is participating inadvertently,' says the NDP's Martin. "There are over 30 weapons in use there from which we will profit financially. This is just contradictory to government policy," he says.

Indeed, can a country say with any credibility that it stands for peace and security while its social programs are being enriched by conflict and war?

Then there's the fact that we are all proud owners of close to $100 million in tobacco stocks. Smoking causes about 45,000 deaths a year and costs the health care system about $3.5 billion annually. Rothmans Inc. is the main beneficiary, with CPP stocks in that corporation valued at about $10 million. However, we're also invested in Big Tobacco in the U.S., Britain, Japan and Sweden.

Rounding out this short list of ethically questionable investment decisions are some corporations whose business and labour practices have kept government agencies, as well as environmental and anti-sweatshop activists worldwide, busy for years. A few of the more infamous names include Nike, Wal-Mart, Monsanto, the Gap and Nortel Networks. CPP investments in these four corporations as of March 31, 2004, are valued at about $350 million.

The CPPIB also invests heavily in big oil companies like Shell, Exxon Mobil and Imperial. While there's no question these companies are profitable, why can we not find more ethical high-yield options?

Eugene Ellman, director of the Social Investment Organization, believes "the attitude (toward social investing) on Bay Street has changed from opposition to curiosity, partly because of the success of the socially responsible investment market itself."

The NDP has put forward a plan to use excess pension funds to create markets for green energy businesses such as energy retrofits for government buildings - and then collecting the energy savings. The party also proposes building low-income housing, collecting returns through mortgages.

But the investment board believes social investing to be near impossible, claiming on its Web site that the personal beliefs of 16 million people are just too varied.

This makes it tough for the average person to be a good, social-safety-net-supporting Canadian. For instance, let's say I'm a smoker. I know I should quit - but am I endangering the future of our pension fund by butting out? Or suppose President Bush decides to launch another illegal war. Would it be in our "best interest" to back it?

I'm starting to see the bright side of pollution, too. The more smog, the better our stocks in oil are doing. As a patriotic Canadian, I think I'll go buy myself a gun, a 12-pack and a carton of smokes and go cruising in the biggest gas-guzzling Hummer I can find.